Further govt compensation to boost performance ahead: BPCL

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S Varadarajan, Director-Finance of BPCL said the government had released Rs 7,239 crore as compensation to the company in the first half of the year. Its cumulative under-recoveries for the first six months were more than Rs 20,000 crore, added Varadarajan.

Further govt compensation to boost performance ahead: BPCL

S Varadarajan, Director-Finance of BPCL said the government had released Rs 7,239 crore as compensation to the company in the first half of the year. Its cumulative under-recoveries for the first six months were more than Rs 20,000 crore, added Varadarajan.

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Further govt compensation to boost performance ahead: BPCL

S Varadarajan, Director-Finance of BPCL said the government had released Rs 7,239 crore as compensation to the company in the first half of the year. Its cumulative under-recoveries for the first six months were more than Rs 20,000 crore, added Varadarajan.

S Varadarajan, Director-Finance of BPCL said the government had released Rs 7,239 crore as compensation to the company in the first half of the year. Its cumulative under-recoveries for the first six months were more than Rs 20,000 crore, added Varadarajan.

Here is the edited transcript of the interview on CNBC-TV18.

Q: Could you take us through the earnings performance this time around and any word yet on the compensation from the government?

A: The compensation in the form of budgetary support from the government has come in for the first half year on provisional basis and the total amount released for the industry has been Rs 30,000 crore. BPCL’s share has been Rs 7,239 crore out of this. This has been accounted for as part of our compensation for the half year.

While for the quarter there has been profit numbers of almost Rs 5,000 crore, what is more relevant is to look at the half yearly number where the cumulative under recovery for the half year has been around Rs 2,653 crore. Out of this, almost 35 percent came from the upstream and it amounted to around Rs 7,280 crore.

We also got a similar 35 percent from the government. All these put together, we received a total compensation of almost 70 percent and we have observed that a balance of almost 30 percent comes to around Rs 6,133 crore. After absorbing Rs 6,100 crore of under recovery, the losses have been around 3,800 crore for the first half year.

Q: Could you tell us going forward any intimation from the government, what the compensation will be for the second half of the year because as you indicated you still have some amount of under recovery which is not completely compensated?

A: I think there is a further compensation which is expected from the government. The final picture would emerge depending on the total quantum of under recoveries which would emerge in Q3 and Q4. We do hope that the balancing amount would also get compensated over the next six months as we move along.

Q: The gross refining margins (GRM) as well have improved this time around USD 4.5 per bbl. Can you give us a sense of what the GRMs could look like as we head into the second half of the year?

A: I think in Q2 the GRMs have been quite healthy while the throughput itself has been more or less similar. The half yearly throughput has been higher compared to what it was in the previous year by almost 1 million tonne.

The GRMs have actually gone up in the half year to USD 4.55 per bbl and for the quarter, the GRMs have been as high as almost USD 6.4 per bbl for both the refineries put together. The yields have been quite good, the losses have been under control and there have been some inventory gains which have gone into the calculation.